WASHINGTON (CN) — The Justice Department and 16 states are suing Apple, accusing the company of trying to create a monopoly on smartphone markets to the detriment of consumers and innovation.
In the lawsuit, filed Thursday in the U.S. District Court for the District of New Jersey, Attorney General Merrick Garland accuses the company of imposing contractual restrictions on developers, undermining apps and limiting functionality with non-Apple products.
Announcing the case, Garland cited one of the most visible problems for Apple users interacting with non-Apple products: messaging. Apple users messaging other phones have texts pop up in a green bubble, but can't see when the recipient receives the message or is responding, the messages aren’t encrypted and videos are purposefully degraded, he said.
“If left unchallenged, Apple will only continue to strengthen its smartphone monopoly,” he said. “The Justice Department will vigorously enforce antitrust laws that protect consumers from higher prices and fewer choices.”
Prosecutors say that Apple has stunted the growth of apps that would make it easier for consumers to switch between competing platforms; blocked development of certain cloud-streaming apps and services; and purposefully made non-Apple smartwatches work poorly with iPhones compared with Apple Watches.
They also say Apple has prevented third-party apps from offering tap-to-pay functionality or digital wallets, forcing iPhone users to share credit and banking information with Apple. This also allows Apple to collect fees from banks and credit card companies, prosecutors said.
The iPhone, which is the core target of the lawsuit, is Apple’s most popular and lucrative product, with billions of users.
“No matter how powerful, no matter how prominent, no matter how popular — no company is above the law,” said Deputy Attorney General Lisa Monaco. “Through today’s action, we reaffirm our unwavering commitment to that principle.”
Garland was confident the lawsuit would succeed despite Apple prevailing in an antitrust suit filed last year by Epic Games, which makes the Fortnite video game series. The developer said the Apple’s app store operated as a monopoly under federal law, but a federal judge sided with Apple.
“The United States normally wins the cases that it brings,” Garland said. “We bring cases because we believe the facts and the law justify them.”
In a statement to The Washington Post, Apple spokesman Fred Sainz said that the lawsuit is “wrong on the facts and the law.”
“This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets," he said. "If successful, it would hinder our ability to create the kind of technology people expect from Apple — where hardware, software and services intersect.”
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